Millennials more likely to seek stock gains through index funds

A new FTSE Russell study reveals a strong preference among millennials for index fund investing, with many viewing it as a straightforward route to long-term growth.

Conducted in mid-2024, the survey included more than 1,000 retail investors aged 25 and older across the US with at least $25,000 in investable assets.

Millennials, whom the survey defined as ages 28 to 43, are embracing index funds at higher rates than previous generations with 45 percent saying they own index funds, compared to 42 percent of Gen X and 34 percent of Boomers. And while 30 percent of millennials see index funds as the best path to achieve long-term growth in their portfolios, just 20 percent of Gen X and 18 percent of Boomers said the same.

“Millennials are embracing index investing with a passion, seeing them as the best way to generate long-term value in their portfolio,” said Jason Meyer, head of asset owners, consultants, and wealth at FTSE Russell. 

Despite their interest in investing, millennials are the least likely generation to work with financial advisors, with only about 53 percent currently engaging an advisor. compared to 57 percent and 63 percent for Gen X and Baby Boomers, respectively. Among advised millennials, a 65 percent majority said they have discussed index funds with an advisor, while 90 percent of those who haven’t yet talked with one expressed a desire to do so.

Millennials who do seek guidance place high value on comprehensive financial planning (45 percent) and educational insights (43 percent), presenting an opportunity for advisors to connect meaningfully with this demographic by addressing their distinct needs and values.

The survey also shows that millennials are interested in aligning their investments with their personal beliefs and causes, with about one-third prioritizing investments that resonate with their values. This trend toward responsible investing highlights an opportunity for financial advisors to help millennials balance their financial goals with personal principles, according to FTSE Russell.